This week marks the anniversary of the $800 Billion stimulus bill.  It was supposed to reduce unemployment to 8%.  It didn’t work.  This new stimulus won’t work either.

Economies grow when people use capital or labor in ways that produce more goods and services at lesser costs.  Example:  If Emerson Electric changes its production process to a motor at $100  instead of $110 dollars, they have just added value to the economy as a whole, because now the economy  has the same motors but more money to spend on other things.  The technical term for this process is: “free enterprise”.  Permanent tax cuts help free enterprise because they increase the returns people get and lead to more work and investment.

By proposing various temporary, narrow tax cuts, the Administration is conceding all this in principle.  So here’s my question.  If tax cuts don’t drive economic growth, why is the Administration proposing these little bits of tax relief?  And if they do drive economic growth, why is Washington planning to raise taxes later this year?